Brooks Brothers Loses Federal Circuit Appeal in Bow-Tie Marking Lawsuit

Brooks Brothers Inc. must face legal claims that the closely held apparel chain marked its bow ties with expired patent numbers, a court decision that may bolster similar lawsuits against more than 350 companies.

The U.S. Court of Appeals for the Federal Circuit in Washington said today that lawyer Raymond Stauffer can pursue his claim against the New York-based clothier. It’s illegal to mislabel products with the wrong patent numbers, and the U.S. lets individuals sue on the government’s behalf and keep half of any penalties, which can be as much as $500 for each item.

Brooks Brothers got Stauffer’s lawsuit thrown out in May 2009 by a judge who said the New Jersey lawyer didn’t have the standing to bring the case. The overturning of that decision today may give new life to the hundreds of false-marking lawsuits against companies including Pfizer Inc., Procter & Gamble Co. and Kimberly-Clark Corp.

“This decision is only going to encourage additional lawsuits,” said Michael Bregenzer of Reed Smith LLP in Chicago, who is defending companies in three cases. “These are errors based on a change in packaging that just isn’t on their radar. These companies aren’t out there trying to deceive anybody.”

A lawyer for Brooks Brothers declined to immediately comment, while a telephone message for Stauffer wasn’t returned. Brooks Brothers is controlled by Enfield, Connecticut-based Retail Brand Alliance Inc.

Solo Cup

The Federal Circuit, in a June decision involving disposable tableware maker Solo Cup Co., said companies can fend off such lawsuits by proving they didn’t mean to deceive customers when posting the expired patents.

“No one snuck into their factories in the middle of the night and surreptitiously marked their products with patent numbers,” said Daniel Ravicher of the Public Patent Foundation, which has a lawsuit against Johnson & Johnson over Tylenol labeling. “The fact that there is a patent marking on their products is 100 percent their own fault. They have to come in and prove they did that without an intent to deceive.”

More than 350 cases have been filed, according to Allen Arntsen, a patent lawyer with Foley & Lardner LLP in Madison, Wisconsin. Some of the cases had been put on hold awaiting today’s decision.

The lawsuits largely started after the Federal Circuit, in a case in December, said companies can face a penalty of as much as $500 for each item falsely marked as under patent protection.

The case is Stauffer v. Brooks Brothers Inc., 2009-1428, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Stauffer v. Brooks Brothers Inc., 08cv10369, U.S. District Court for the Southern District of New York (Manhattan).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

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